A judge today gave his reasons for dismissing a challenge to permission for a planned £1bn redevelopment of a Croydon shopping centre and surrounding sites by Westfield and Hammerson, which had been branded as “unviable” by current leaseholders opposing the scheme at the High Court.
At the end of the hearing last month, Collins J announced that he would dismiss the claim brought by four leaseholders in the existing Whitgift Centre, who face the threat of compulsory acquisition of their land. A CPO was made on 15 April 2014 and an inquiry is fixed in the new year.
Today, in his written judgment, the judge said that the Whitgift Centre had in recent years begun to lose its attraction for shoppers and that “undoubtedly there is a need for revitalisation”.
Describing the plans, he said that not only is the retail element to be upgraded but the redevelopment is to include leisure facilities and housing on the basis that a revitalised retail and leisure environment will attract residents to the centre of Croydon.
In a report to the London Borough of Croydon’s planning committee, before its decision taken in February, an officer’s opinion was that the proposed development would bring sufficient economic, social and environmental benefits through much-needed reinvigoration of the retail core, including the creation of around 5,000 new jobs and economic investment, new homes and significant visual and public realm improvements.
Deloittee Real Estate had been commissioned to report on viability, and the judge said that Deloitte’s overall view at that stage, when considering all information before it and having regard to the assumptions that had had to be made where concrete information was not available, was “somewhat guarded”.
He added: “The point was made that it was not unusual at the relevant stage for there to be a viability gap which could be overcome as time passed. There was, however, at that stage a significant deficit between scheme values and costs such that CLP’s return on income was not viable. The gap would require movements in values and costs. Any higher planning contributions (which would include affordable housing and traffic measures) would only increase the viability gap. There was scope to make significant savings in a number of areas as the scheme, which had an unusually high land assembly budget, progressed.”
However, in a subsequent Deloitte report in March this year, he said: “Its conclusion was that financial viability did not give rise to an impediment to the implementation of the scheme. By then Deloitte had fuller information including the section 106 agreement and the conditions imposed.”
The leaseholders had complained that the earlier report – which was treated as confidential – should have been disclosed to them ahead of the decision to grant planning consent. That, they said, would have enabled them to make their objections in a focused manner and to give the committee the full picture in deciding whether to grant the applications.
But the judge, dismissing the claim, said: “It is in my view important to recognise that a CPO is needed. Viability, albeit particularly material to the affordable housing element since it was limited to 15%, is not generally speaking a proper reason for refusing permission, at least where a reputable developer puts forward a scheme which he maintains he intends to pursue. If third parties are likely to be affected because land may be subject to permission which is not viable but which may have an adverse impact on them, viability will be material. In this case, since it was known that a CPO would be needed, deliverability would have to be demonstrated. Thus the claimants’ rights will be protected. In the circumstances, overall viability was not a matter to be considered in detail since it would not be a reason to refuse outline planning permission. It was, and the councillors were told it was, a matter to be taken into account in considering whether the affordable housing requirement could be met.
“The claimants have been able to make their objections to the proposals and will be able to challenge the CPO. They will then have all information properly available. The viability of the scheme will be tested on the information available at the CPO inquiry. However, it is not necessary to go further than that. In my view, the claimants have not in the circumstances suffered any prejudice from non-disclosure nor has the committee been misled or not given proper information in reaching the decision to grant the applications made.”
He added that their remedy on disclosure of confidential information lies with the Information Commissioner.
Also rejecting an argument that the council wrongly failed to apply a sequential approach, he said: “The argument in favour of a sequential approach is based on the site being edge of centre. It is however entirely artificial. The Whitgift Centre lies within the designated primary shopping area and within the Croydon Metropolitan Centre. Thus it was in my view entirely proper to regard the development as being in accordance with the relevant planning policy. To require in the circumstances an application of a sequential test would have been an entirely futile exercise and in any event could have made no difference to the outcome.”
The Queen on the application of Equiom (Isle of Man) Ltd and ors v London Borough of Croydon Planning Court (Collins J) 10 November 2014
Russell Harris QC and Matthew Reed (instructed by CMS Cameron McKenna) for the claimants
David Elvin QC and Richard Turney (instructed by Pinsent Masons) for the defendant
Nathalie Lieven QC (instructed by Herbert Smith Freehills) for the interested parties
